The Next Big Fight in Income Inequality Is About to Go Down in California

Can the entire Bay Area raise the minimum wage to $15 per hour?

July 31, 2014

Congress can barely name a post office without partisan rancor, so it’s light years away from taking any meaningful action on income inequality. That’s why hope has shifted to states and cities. Seattle led the way in June with a successful drive to raise the minimum wage to $15 an hour. But further down the Pacific Coast, in the San Francisco Bay Area, a coalition of labor and community groups has put together a much more ambitious, comprehensive, and muscular plan to raise the minimum wage—one that doesn’t stop at the limits of any single city. Over time they want to create a regional living wage across eight counties, lifting the fortunes of the working poor.

Two measures will appear before voters this November in Oakland and in San Francisco, where a ballot initiative to raise wages to $15 an hour by 2018 for all workers in the city qualified Tuesday. Similar measures will appear in the next two years in Berkeley and Richmond. And if they succeed, more will follow, as far north as Sonoma and Napa and as far south as San Mateo. Opponents of the higher minimum wage in Seattle argued that it would drive businesses to lower-wage pastures. If California’s region-wide gambit works, businesses will have nowhere to flee if they want to tap into the wealthy customer base in northern California. They’ll simply have to treat their workers well.

The movement is led by the Service Employees International Union (SEIU) local 1021, but the benefits would be enjoyed by all workers in the covered area. They have joined with statewide organizing groups like the Alliance of Californians for Community Empowerment, as well as different community, faith and labor groups in each city. The San Francisco group is called the Coalition for a Fair Economy; in Oakland, it’s Lift Up Oakland.

Organizers have approached the minimum wage as a rare economic justice wedge issue, allowing for a boldness not typically seen in modern labor fights. Like Seattle, they want to raise it to $15 an hour. But they have also added several new core principles: Indexing the minimum wage to the cost of living, rejecting any exemptions or carve-outs for categories of workers, protecting tipped workers from having their tips taken by their employer, and including paid sick days. Combined, this would create the most full-service set of benefits for low-wage workers in the nation.

In San Francisco, SEIU 1021’s strategy worked perfectly. The city already has laws for paid sick days and protecting workers’ tips, making it a natural starting point. In April, the Coalition for a Fair Economy, led by SEIU 1021, released its ballot measure to raise the minimum wage to $15 an hour by 2017, with cost of living adjustments thereafter. The San Francisco Chamber of Commerce immediately denounced it as outrageous. But minimum wage measures are popular—the last one in San Francisco in 2003 passed with well over 60 percent of the vote. So the threat of the ballot measure forced the Chamber and Mayor Ed Lee into negotiations with the coalition. Eventually the two sides reached a consensus, endorsing a new ballot measure that delayed the move to $15 until 2018, while retaining every other aspect. It will head to voters for approval in November.

Oakland’s business leadership proved more stubborn. So, with the backing of nearly 50 groups and 1,000 volunteer hours, Lift Up Oakland collected 33,000 signatures to qualify a referendum that would immediately raise the minimum wage for everyone in Oakland to $12.25 an hour, with inflation-based indexing thereafter, and paid sick days as well. Organizers estimate that the wage would hit $15 an hour by 2021, roughly the same time frame as Seattle.

The local Chamber of Commerce attempted a rearguard action, partnering with the President of the Oakland City Council, Pat Kernighan, to submit a last-minute alternative. It would have delayed the increase to 2017 and exempted workers younger than 26 years old, as well as those working at small businesses. Lift Up Oakland saw this as a back-door effort to deny raises to franchise workers in big-box stores and fast-food joints, by categorizing them as small businesses. So it sent actors dressed as Colonel Sanders and the Burger King to Tuesday night’s city council meeting, to “endorse” the measure. “We want to thank the Oakland Chamber of Commerce and Pat [Kernighan],” Colonel Sanders said. “We can keep finding excuses to keep workers in poverty.”

The city council voted 5-3 to reject the alternative ballot proposition. Only the Lift Up Oakland version will get a vote in the fall. Despite a billboard campaign claiming low-wage workers will get replaced with iPads if they demand higher wages, polling shows nearly three-quarters of voters supporting the initiative in Oakland. “But it must be just one step in raising working standards for all workers in the Bay Area and nationally,” said Roxanne Sanchez, President of SEIU 1021.

To that end, the coalition plans to expand out in the coming years, starting with Richmond and Berkeley. Both cities passed minimum wage increases in May. But Richmond’s includes several exemptions, like one for businesses that primary export goods, a carve-out specifically designed for its large Chevron refinery. And Berkeley’s law has no cost of living adjustment or paid sick days. So SEIU plans to use the ballot in 2015 and 2016 to replace the current laws with loophole-free alternatives. They’ve also begun work on future fights in Emeryville, Albany, Hayward, Concord, Sunnyvale, and Sonoma.

Once the biggest cities in the Bay Area switch to a higher minimum wage, SEIU leaders believe the smaller ones will follow. “We want to get the entire region,” said 1021 vice president Gary Jimenez. “The standards are much easier to enforce from the same starting place.” And the momentum appears contagious: Los Angeles is planning its own $15 an hour measure, and San Diego’s city council just passed a more modest increase (which Republican Mayor Kevin Faulconer plans to veto).

To be sure, the California Bay Area’s strong liberal population gives organizers lots of leverage in minimum-wage fights. But raising the minimum wage is broadly popular, particularly in communities with high levels of low-wage workers. If the city allows for ballot initiatives, coalitions can leap past the cautiousness of politicians and business leaders and take their fight directly to the people.

It also gives the SEIU an opportunity to recast itself ahead of future fights. “The unions are standing up for the working class as a whole, instead of being seen as a special interest defending their membership,” said Rich Yeselson, a longtime labor organizer. SEIU has its own interests at heart too. It has made a bet on the low-wage sector, underwriting the fast-food worker movement with hopes of eventual unionization. Combined with a National Labor Relations Board ruling yesterday, making McDonald’s liable for actions of its franchisees, the low-wage sector could help labor revive its flagging fortunes and prove itself relevant in the inequality debate.

Liberals have long searched for an issue that can attract widespread support and generate tangible economic progress. This minimum wage battle, tailor-made for metropolitan areas with strong left-labor coalitions, provides an opportunity.

“This economic downturn touched people across the nation,” said Gary Jimenez of SEIU 1021. “People have been hit so hard that they understand the problem of inequality and a need to address it. People will vote to do the right thing because it’s in their hearts and their minds.”